CareCloud announces workforce reduction, to cut operating costs by $10M

In a regulatory filing, CareCloud said that on October 2, it committed to effectively align resources with business priorities and improve profitability through a reduction in its work force. After the reduction is implemented and through employee attrition, the company expects an improvement of approximately $10M in annualized free cash flow, which represents approximately 14% of total payroll cost. This reduction will result in approximately $5M in annualized expense savings. The difference between the free cash flow and the expense savings represents amounts which were previously accounted for as part of software capitalization. A majority of the impacted employees will exit in the fourth quarter of 2023. The company estimates that it will incur expenses of approximately $0.5M related to the reduction in work force, of which approximately $0.4M is expected to be incurred in 2023, with the remaining expenses to be incurred during 2024. These expenses will consist of one-time termination benefits, including but not limited to, severance payments and healthcare benefits.